A snapshot of how the office space leasing stats look | October 2021
The year-long hope that the vaccination roll-out would nip this novel virus in the bud has for the most part been dashed, at least in the U.S. A combination of inconsistent state-by-state guidelines & restrictions along with a categorical refusal to receive the vaccination by population areas has created a space for a less-lethal but more contagious variant to take hold of communities across the nation. After a steady decline from January 2021 to June, a noticeable uptick of reported covid cases began in July 2021. According to the CDC, the 7-day moving average for reported covid cases in June was about 12,000. By the end of July, the 7-day average had jumped to 60,000. While the original strain spread typically resulted in one infected person spreading it on average to two people, the Delta variant has that same infected person spreading it to five. Delta (just one of the variants that have been detected globally) is the most prevalent strain and biggest concern in the U.S.
Photo credit: Johns Hopkins University
What does this mean for the real estate market that has been heavily affected by the pandemic?
Here are some current stats according to Newmark on the commercial real estate office market:
D.C.
Vacancy rate:
Average asking rent (price/SF):
16.7% (a slight increase from second quarter)
$57.18 (asking rent at the same time last year was $58.33)
Suburban Maryland
Vacancy rate:
Average asking rent (price/SF):
16.2% (an increase from last quarter)
$29.64 (asking rent at the same time last year was $28.85)
NoVa
Vacancy rate:
Average asking rent (price/SF):
20.5% (no change from previous quarter)
$34.48 (up slightly from the same time last year)
What are the projections? With the national unemployment rate decreasing to 4.8% (still slightly higher than the pre-pandemic unemployment rate of 3.5%) and an addition of over 100,000 jobs in the DC metro area alone (a 3.3% increase from last year) the economy, especially locally seems to be coming back. Although Newmark expects the area’s office vacancy rate to increase slightly over the next two years.
However, Generally, the commercial real estate sector is reporting confidence in market conditions for industrial, multi-family and single-family assets. Hospitality also looks to be on the rise as travel continues to come back after the covid era as people begin to travel more.
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Commercial office space sector relative to the country
As of summer of 2020, the Washington DC metropolitan area has beaten out the Dallas-Ft. Worth area for most amount of office space in its suburban areas: 230.6 million square feet to DFW’s 229. A large part of this competitive edge is Tysons Corner, with an astounding 28.3 million square feet alone of rentable office space in its suburban areas (making Tysons the 7th overall submarket in the country)
Photo credit Commercial Cafe
Main photo credit pexels-pixabay
